Contingent capital: the trigger problem
AbstractPrice triggers in contingent capital bonds are analyzed. Pervasiveness of multipleequilibria and nonexistence of equilibrium in theoretical models is illustrated. Evidence of these problems from market experiments is summarized. Possible solutions are evaluated.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Richmond in its series Working Paper with number 11-07.
Date of creation: 2011
Date of revision:
Other versions of this item:
- NEP-ALL-2012-04-10 (All new papers)
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- Edward S. Prescott, 2011.
"Contingent capital: the trigger problem,"
11-07, Federal Reserve Bank of Richmond.
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Carnegie-Rochester Conference Series on Public Policy,
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- Douglas D. Davis & Korenok Oleg & Edward S. Prescott, 2011. "An Experimental Analysis of Contingent Capital with Market-Price Triggers," Working Papers 1102, VCU School of Business, Department of Economics, revised Apr 2013.
- Edward S. Prescott, 2001. "Regulating bank capital structure to control risk," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 35-52.
- Edward S. Prescott, 2012.
"Contingent capital: the trigger problem,"
Federal Reserve Bank of Richmond, issue 1Q, pages 33-50.
- Fernando Díaz & Gabriel Ramírez & Kenneth Daniels, 2013. "Corporate Bond Clawbacks as Contingent Capital," Working Papers 44, Facultad de Economía y Empresa, Universidad Diego Portales.
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